CICC released a research report stating that considering the upward shift in the valuation center of the industry, the target price for BYD Electronics (00285) was raised by 6.1% to HK$38.2, corresponding to price-earnings ratios of 17.2 and 12.8 times this year and next, respectively. Maintaining a “outperforming the industry” rating. The bank said it is concerned about the development of the Group's data center business and is optimistic about cooperating with NVIDIA to accelerate the pace of its AI-related expansion.
The bank pointed out that BYD Electronics' results for the 3rd quarter of this year are in line with the forecast. Among them, the Group's revenue increased 21.08% year-on-year in the 3rd quarter, benefiting from strong demand from overseas customers Jeep and sales growth from the Group's parent company, reaching a record high. Also, as the JP business has entered the peak delivery season and the continuous improvement of the original product structure, the Group's gross margin improved month-on-month during the quarter. However, CICC believes that the reason why BYD Electronics' net profit increase in the third quarter was less than revenue may have been affected by exchange losses between the US dollar and RMB, which dragged down the overall net profit performance.
